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The Federal Reserve And Eurosystem´S Balance Sheet Policies During The Financial Crisis: A Comparative Analysis

Author

Listed:
  • Philipp Bagus

    (Universidad Rey Juan Carlos)

  • David Howden

    (St. Louis University)

Abstract

The balance sheet developments of the Federal Reserve System have received increased attention during recent events. The Fed has expanded its balance sheet and also changed its composition in order to support the financial system. As a consequence the average quality of the assets have, on average, deteriorated. In a similar way, the ECB has recently implemented novel balance sheet policies. In this article we compare the balance sheet policies of these two central banks. We assess the differences in policy strategies and deduct consequences concerning the quality of the respective currencies, as well as future directions of monetary policy.

Suggested Citation

  • Philipp Bagus & David Howden, 2009. "The Federal Reserve And Eurosystem´S Balance Sheet Policies During The Financial Crisis: A Comparative Analysis," Romanian Economic Business Review, Romanian-American University, vol. 4(3), pages 165-186, September.
  • Handle: RePEc:rau:journl:v:4:y:2009:i:3:p:165-186
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    File URL: http://www.rebe.rau.ro/RePEc/rau/journl/FA09/REBE-FA09-A15.pdf
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    References listed on IDEAS

    as
    1. Heitor Almeida & Thomas Philippon, 2007. "The Risk-Adjusted Cost of Financial Distress," Journal of Finance, American Finance Association, vol. 62(6), pages 2557-2586, December.
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    Citations

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    Cited by:

    1. Philipp Bagus, 2011. "The Eurosystem: Costs and Tragedies," Chapters,in: Institutions in Crisis, chapter 7 Edward Elgar Publishing.
    2. Bagus, Philipp & Howden, David, 2014. "Central Bank Insolvency: Causes, Effects and Remedies," MPRA Paper 79605, University Library of Munich, Germany.
    3. Maria Alvarado & Laura Muro & Kirk Lee Tennant, 2011. "Europe’s Crisis of Accounting," Chapters,in: Institutions in Crisis, chapter 5 Edward Elgar Publishing.
    4. Bagus, Philipp & Howden, David, 2010. "The Term Structure of Savings, the Yield Curve, and Maturity Mismatching," MPRA Paper 79592, University Library of Munich, Germany.
    5. Bagus, Philipp & Howden, David, 2016. "Central Bank Balance Sheet Analysis," MPRA Paper 79801, University Library of Munich, Germany.
    6. Costa Cabral, Nazare, 2010. "Breve guia temático e bibliográfico sobre o estudo da actual crise financeira e económica
      [Short thematic guide to the study of current financial and economic crisis]
      ," MPRA Paper 20743, University Library of Munich, Germany.
    7. Malte Tobias Kähler, 2011. "From German Rules to European Discretion: Policy’s Slippery Slope," Chapters,in: Institutions in Crisis, chapter 9 Edward Elgar Publishing.
    8. Gabriel A. Giménez-Roche, 2011. "Institutional Illusion and Financial Entrepreneurship in the European Debt Scheme," Chapters,in: Institutions in Crisis, chapter 1 Edward Elgar Publishing.
    9. Bagus, Philipp & Howden, David, 2014. "Fiscal Considerations of Central Bank Recapitalization," MPRA Paper 79606, University Library of Munich, Germany.

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